Torrent Pharma buys Curatio Health for Rs2,000 crore
Torrent Pharmaceuticals will acquire 100% stake in Curatio Healthcare for a consideration of Rs2,000 crore. Curatio has cash and cash equivalents on its balance sheet of Rs115 crore , so the effective enterprise valuation of Curatio comes to the net amount of Rs1,885 crore. Curatio is a leader in the cosmetic dermatology segment, which is one of the high growth and high margin segments in the pharma space. Post the merger, Torrent will have the advantage of an existing and well accepted presence in the cosmetic dermatology space, which Torrent Pharma sees as a strategic fit to its core business model.
Torrent Pharma will be able to enhance its presence in the dermatology segment with a differentiated portfolio of high quality dermatological products that are well accepted in the market. More importantly, Torrent Pharma will get the added benefit of a field force of 600 medical representatives (MRs) as well as a readymade distribution network of more than 900 stockists. Curatio is extremely strong and well established in the cosmetic dermatology segment and has a portfolio that comprises over 50 brands. All these brands are marketed by its own internal team across the length and breadth of India.
For the financial year FY22, Curatio Pharma had recorded total top line sales of Rs224 crore, so it is substantially smaller than Torrent Pharma in terms of size, which is almost 40 times larger than Curatio Pharma in top line with annual sales exceeding Rs8,500 crore for the full fiscal year FY22. For now, the entire transaction is expected to be completed and closed within about one month time frame. However, there are certain conditions to be fulfilled by both parties to the deal and the regulatory approval would also be required including the necessary approval from the stock exchanges, the NCLT and the pharma regulator.
Torrent Pharma is of the view that the Curatio Pharma deal would give Torrent the prefect setting to enhance its presence in the cosmetic dermatology segment. Currently, Curatio has an array of high value brands with a strong loyalty and market share. These are focused in the cosmetic and paediatric dermatology segments and is likely to become a product extension for the much larger Torrent Pharma. It may not offer much in terms of top lien growth, but would surely boost its profit growth and its presence in the very niche segment of cosmetic and paediatric dermatology.
For Curatio, Torrent offers a much more stable partner with a bigger balance sheet and the ability to bankroll its future growth plans. After all, Torrent Pharma has annual revenues of over Rs8,500 crore and is a market leader in the Cardiovascular (CV), Gastro Intestinal (GI), Central Nervous System (CNS) and in the Vitamins Minerals Nutritional (VMN) segment.
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